Some Airbnb Listings Could Be Breaking The Law

The Internet is causing big changes to the hospitality business. Instead of sleeping in hotels, many travelers now spend the night in private homes, which they find through websites such as Airbnb. But there's a catch.

Transcript

LINDA WERTHEIMER, HOST:

The Internet has been making big changes to the hospitality business. Here's one way. Instead of sleeping in hotels, a lot of travelers now spend the night in private homes, which they find through websites, such as Airbnb. But there's a catch. In many cities, such arrangements are not quite legal. Ilya Marritz, of member station WNYC, reports.

ILYA MARRITZ, BYLINE: The night before he was due in court, Nigel Warren(ph) slept badly. He rose before daybreak, made himself some coffee and considered the cloud he's been living under. Last summer, Warren posted his fifth floor Manhattan walkup on Airbnb and rented it to a traveler from Russia.

NIGEL WARREN: I rented out my place for a few days and I made $300. And that was money that I was basically just using to help cover the rent while I was away. I thought, great, this will chip in.

MARRITZ: But soon after that, Warren's landlord received a flimsy yellow piece of paper. It said the apartment was being run as an illegal hotel, and it racked up an array of violations. Warren promised to take care of it and felt sticker shock when he calculated the potential penalty.

WARREN: So having got $300 and being threatened with fines of $30,000, is just so - the punishment doesn't fit the crime.

MARRITZ: Thirty-thousand dollars.

WARREN: Yeah.

MARRITZ: Warren is 30 years old and works as a web designer. On this morning, he's on his way to a hearing where he'll try to convince a judge that he did nothing wrong. His financial wellbeing depends on it. Until recently, it wasn't so common for people to rent out their homes to strangers on a short term basis. Now, the internet makes it easy. Airbnb claims one new booking every two seconds.

But things haven't always gone smoothly. In many cities, there have been complaints about safety and unexpected encounters with strangers. John Feinblatt, chief policy advisor to New York City Mayor Michael Bloomberg, points out there are different building codes for private homes and for hotels.

JOHN FEINBLATT: Hotels have to have sprinkler systems. Hotels have those instructions on the back of the door because people who stay for a week or a day need these extra support in case of an emergency.

MARRITZ: For a long time, Airbnb brushed aside these kinds of concerns. The site said it was up to individual users to know their local laws and then click on the 12,000 word terms and conditions. Now the company is signaling a new openness about complaints. David Hantman is Airbnb's new head of global public policy.

DAVID HANTMAN: One way or another, these are issues that come up a lot, and so we know we have to engage in them on behalf of hosts.

MARRITZ: Hantman travels frequently, talking to lawmakers in different cities. His message, there's nothing to fear in short term rentals, so adjust the laws to make it simpler.

HANTMAN: This is really age-old activity just brought onto the Internet in a more efficient way. Just like for EBay, you know, people would always buy and sell things. EBay just made it easier.

MARRITZ: Perhaps too easy for Nigel Warren. Now he's in a waiting room with a folder full of documents to show to a judge. Warren believes he broke no laws, but he's worried.

WARREN: My girlfriend sent me a text.

MARRITZ: What'd she say?

WARREN: She said, hey, good luck today. I want to hear how it went after.

MARRITZ: When Warren gets to the judge's chamber, a lawyer for the city asks for more time to produce evidence, and so the risk remains. Nigel Warren may still owe thousands of dollars. So how are feeling?

WARREN: Tired, I'm a little frustrated, but this is life, right? What do you do?

MARRITZ: Warren's plan is to keep fighting. Sure, the violations were issued to his landlord, but it was his decision to put the apartment on Airbnb, so he'll be back in court soon to make his case. For NPR News, I'm Ilya Marritz in New York. Transcript provided by NPR, Copyright NPR.